ABSTRACT This is a revised submission of application #1F32DE027599-01 on the ?local modulation of retinoic acid signaling in cranial placode formation?. Cranial placodes are focal thickenings of the embryonic ectoderm that differentiate during development to specify key structures in the vertebrate head, including paired sensory organs and sensory cranial ganglia. All cranial placodes arise from a common progenitor territory called the pre-placodal region (PPR). In response to cues from the surrounding tissues, the PPR eventually segregates along the anterior-posterior axis of the embryo to form distinct placodal domains that contain cell-types specific to each of the sensory placodes: the adenohypophyseal, olfactory, lens, trigeminal, epibranchial and otic placodes. Mutations that disrupt placode specification cause a wide range of congenital birth defects that are characterize by sensory loss in the form of blindess or deafness, or hormone imbalances due to pituitary defects, and loss of sensory enervation to the orofacial region. Because the mechanisms of cranial placode specification are poorly understood, there are limited strategies to intervene and clinically improve the outcome of these defects. The Saint-Jeannet Lab uses Xenopus laevis to study the basic mechanisms of craniofacial development as their blueprint highly conserved across all vertebrates. Previous studies in the lab have demonstrated that the zinc-finger transcription factor Zic1 promotes placodal fate in a non-cell autonomous manner by activating retinoic acid (RA) signaling pathway. Among the genes upregulated are the RA catabolizing enzyme Cyp26c1 and an RA-regulated homeodomain transcription factor Pitx2c. Preliminary results suggest that Cyp26c1 is important for PPR specification and plays a role in preventing excess RA accumulation. Additionally, Pitx2c and Cyp26c1 were found to share a common domain of expression that occupies the region between anterior neural plate, where Zic1 induces RA synthesis, and the prospective PPR. Based on these observations, I hypothesize that Cyp26c1 participates in local degradation of RA in order to establish the appropriate threshold of RA levels, which can subsequently activated Pitx2c-mediated gene expression for the formation of PPR. I will use a combination of developmental, genetic and high throughput screening approaches to determine how Cyp26c1 and Pitx2c modulate RA levels for the appropriate spatial positioning of PPR, and also identify novel genes that play key roles in PPR formation. This study will address current gaps in our knowledge as to how morphogen gradients are locally modulated to regulate gene expression in particular cells, and will also uncover new genes that are involved in cranial placode specification. The findings from this study will provide deeper insights into the mechanisms of placode specification and will shed light on the molecular basis for craniofacial defects affecting sensory organs.